UK ‘should commit to Living Wage by 2025’

The UK should commit to a Living Wage by 2025 at the latest, according to a major report on child poverty and social mobility.

The second annual State of the Nation Report from the Social Mobility and Child Poverty Commission (SMCP) says that tax credits cannot bridge the “chasm” between low income households and the rest and calls on employers to raise wages and workers to increase their hours. It says that all Budget decisions should be assessed for their impact on social mobility and child poverty so that the working poor are better protected and it calls for a link to be made between economic growth and wages.

The Report says that Britain is on the brink of becoming “a permanently divided nation” and predicts 2020 could mark the end of the first decade since records began without a fall in absolute poverty.

The Report warns that “2020 could mark a watershed between an era in which for decades there have been rising living standards shared by all and a future era where rising living standards by-pass the poorest in society.”

It warns that the link between effort and reward on which social mobility relies has been broken by changes in the housing market – with home ownership rates halving among young people in 20 years – and the labour market – with five million workers trapped in low pay.

It says: “When combined with cuts in welfare and public spending, these changes put Britain on track to become a permanently divided nation unless radical new approaches are taken by the next government to meet this 2020 challenge. It finds no political party is being honest about the impact of planned spending cuts or has sufficiently ambitious plans to tackle entrenched levels of low pay.”

It concludes that there is no way the government can meet the statutory target to eradicate child poverty by 2020. It calls on the next government to supplement the existing targets with new measures to give a more rounded picture of poverty and to publish a new timescale for achieving them.

The report advises the government to commit to objectives, including a call for the best teachers to be paid more to teach in the worst schools to help end illiteracy and innumeracy in primary school by 2025 and to halve the attainment gap in secondary school by 2020 and for unpaid internships to be made illegal and for 5,000 more pupils from a free school meals background to be going to university by 2020.

Alan Milburn, Chair of the Commission said: “The circumstances are so different, the challenges are so great that the old ways of thinking and acting that have dominated public-policy making for decades will simply not pass muster. What worked in the past will not serve as an adequate guide for the future. A new agenda is needed.”